A. Naper Company factored $800,000 of accounts receivable with recourse to Prime Finance Company. Prime charges a finance fee of 5% of accounts receivable and withholds 8% of accounts receivable for sale contingencies. Record the journal entry for 5 Naper and Prime to recognize the factoring agreement. Credit Naper's books: 8 Cash 9 Due from factor 10 Factoring expense 11 Accounts receivable Debit 696,000 64,000 40,000 800,000 13 14 Prime's books: 15 Accounts receivable 15 Due to seller 1 Financing revenu 11 Cash Debit 800,000 Credit 64,000 40,000 696,000 B. Assume that Prime collects 5744,000 of the receivables in cash. Sales discounts taken by the customers are $12,000 and sales returns and allowances are $16.000. The - oring Journal B. Assume that Prime collects $744,000 of the receivables in cash. Sales discounts taken by the customers are $12,000 and sales returns and allowances are $16,000. The remaining difference in accounts receivable is uncollectible accounts. Prepare the journal entries for Naper to recognize the collection of receivables and settlement of the 23 factor agreement. 24 25 Naper's books: Debit Credit